Things To Know About The $6.9B Nvidia-Mellanox Acquisition

CEO Jensen Huang attends an event during the annual Computex computer exhibition in Taipei Taiwan

CEO Jensen Huang attends an event during the annual Computex computer exhibition in Taipei Taiwan

As well as gaining significant resources from Mellanox, Nvidia's deal keeps these same resources out of the hands of direct competitors like Intel.

"The deal will give Nvidia an even bigger market share in the data-center market", he said. NVIDIA wasn't the only one with its name in the acquisition hat with Intel being outbid by the GPU giant in its quest to acquire Mellanox.

Mellanox gives Nvidia more entries into high performance computing and the data center.

"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", said Nvidia founder and CEO Jensen Huang in a statement. It is believed that Nvidia Corporation (Nasdaq: NVDA) has joined the list of candidates to buy Mellanox, alongside Intel, Xilinx, and Microsoft, which have been touted as possible buyers in the past. But the performance growth of the GPUs that NVIDIA makes has not slowed in the same way, and they have been found to work particularly well in modern, datacenter-based workloads.

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Mellanox is traded on Nasdaq at a market cap of $5.9 billion. If you recall Tilera and its manycore product designs, Mellanox (and now Nvidia) are where that IP ended up. Intel and Mellanox did not immediately respond to requests for comment. The company is known for producing high-speed networking components using Ethernet and InfiniBand.

Nvidia has been looking at boosting its data centre revenue for some time.

"We're not changing our guidance that we just provided about a month ago for the current fiscal year", Nvidia Chief Financial Officer Colette Kress told the conference call.

A chip expert says the deal will give Nvidia an even bigger market share in the data-center market, which Reportlinker says will reach revenues of around $174 billion by 2023. The transaction has been approved by both companies' boards of directors and is expected to close by the end of CY 2019. It could, however, face some regulatory hurdles in China, where Mellanox has major customers such as Alibaba and Baidu.

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