NVIDIA To Acquire Datacenter Networking Firm Mellanox for $6.9 Billion

Nvidia offers bid for Israeli chip firm Mellanox: report

NVIDIA buys high-performance chip-maker Mellanox for $6.9 billion

Mellanox, managed by founder Eyal Waldman, produces interconnect solutions using InfiniBand and Ethernet technologies.

It's a hefty deal, and one that Nvidia reportedly beat out bids from Intel and Microsoft to arrange.

Nvidia had $2.9 billion in sales from its data center unit last year, up from $830 million two years earlier. Combined, Nvidia and Mellanox power more than half of the world's top 500 supercomputers. Nvidia shares gained 4.8 percent at 11:38 a.m. Monday in NY to $157.79.

Nvidia says that going forward, with Mellanox onboard, it'll be able to "optimise data center-scale workloads across the entire computing, networking and storage stack to achieve higher performance, greater utilization and lower operating cost for customers".

Xilinx Inc was also part of the process, sources said.

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GRAPHICS OUTFIT Nvidia has confirmed that it's buying Israeli chipmaker Mellanox for $6.9bn (£5.3bn). The rate at which chips direct that traffic has become increasingly important as corporate computer networks and cloud service providers try to make sense of the growing flood of data being generated.

FILE PHOTO - The logo of Nvidia Corporation is seen during the annual Computex computer exhibition in Taipei, Taiwan May 30, 2017.

"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 founder and CEO Jensen Huang said in a prepared statement. Imagine the possibility of combining NVLink - Nvidia's high-speed protocol for intra-GPU communication - with Mellanox's networking and server products.

Goldman Sachs served as exclusive financial adviser to Nvidia, while Credit Suisse Group and JPMorgan Chase & Co. advised Mellanox. With a price tag of $6.9 billion, NVIDIA's acquisition will be vaulting the company deep into the datacenter networking market, making them one of the leading vendors virtually overnight.

In Intel's case, the tech giant was likely looking to "corner the market" with its bid as Engadget.

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