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Nvidia sees off Intel to acquire Mellanox for $6.9 billion

The acquisition builds upon Nvidia's previous work with Mellanox

Nvidia has announced it will acquire Israeli networking firm Mellanox Technologies for $6.9 billion, after the GPU giant successfully saw off competition from major chip rival Intel.

Its biggest-ever acquisition, the deal unites Nvidia’s computing platform with Mellanox’s interconnect chips to optimise data-centre scale workloads across the entire computing, networking and storage stack. As a result, customers will benefit from higher performance, greater utilisation and lower operating costs, the company said.

The move marks a major play from Nvidia, solidifying the GPU specialist’s status as a direct competitor to global giant Intel, which bid around $6 billion for Mellanox back in January, according to Calcalist. US semiconductor manufacturer Xilinx is also believed to have been involved in the bidding process.

It also provides a timely shot in the arm for the company’s data centre business, which currently makes up around a third of its overall sales. Back in January, Nvidia it cut its fourth-quarter revenue estimate by around half a billion dollars due to weak demand for its gaming chips in China, as well as disappointing data centre sales.

“The emergence of AI and data science, as well as billions of simultaneous computer users, is fueling skyrocketing demand on the world’s datacenters,” 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 datacenter-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 datacenter-scale computing solutions.”

The two companies already boast a long history of collaboration, highlighted by their contributions to Sierra and Summit – the world’s two fastest supercomputers at the US Department of Energy. Many leading cloud providers also utilise Nvidia GPUs and Mellanox interconnects, with the companies’ shared performance-centric culture allowing for seamless integration.

“We share the same vision for accelerated computing as Nvidia,” said Eyal Waldman, founder and CEO of Mellanox. “Combining our two companies comes as a natural extension of our longstanding partnership and is a great fit given our common performance-driven cultures.

“This combination will foster the creation of powerful technology and fantastic opportunities for our people.”

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