Nvidia buys Israeli chipmaker Mellanox for £5.3bn

Andrew Cummings
March 11, 2019

Calcalist said that Nvidia would have an advantage over Intel in its bid, as it would have a greater chance of getting both United States and Chinese regulatory approvals, given that Intel and Mellanox control the market for InfiniBand technology, a computer-networking communications standard that is used in high performance computers.

Mellanox, an Israeli provider of networking components for data centers, had reportedly been on the market for several months following a fight with an activist investor, and multiple buyers had lined up before Nvidia sealed the offer Monday.

Starting off the week bright and early, NVIDIA this morning announced that they're acquiring datacenter networking and interconnect Mellanox. It boasts that its technology is used in half of the top 500 most powerful supercomputers.

'We share the same vision for accelerated computing as Nvidia, ' adds Eyal Waldman, founder and chief executive of Mellanox.

There's a chance that the Mellanox could be returning to the fold, however: Reports have begun to circulate that Intel has been bidding to acquire Mellanox, but the most recent of these warns that it is being outbid by Nvidia as the company looks to extend its efforts in the high-performance computing (HPC) market.

"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 Nvidia founder and CEO Jensen Huang in a statement.

"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".

The two companies are also long-time partners.

Mellanox will be accretive to Nvidia's non-GAAP earnings and cash flow.

The headlining transaction has already been approved by both companies' boards of directors and is expected to close by the end of calendar year 2019.

With the acquisition of Mellanox, NVIDIA will be able expand in those areas.

Nvidia will conduct a webcast at 5:30 a.m. PT today to discuss the transaction.

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