Nvidia to acquire high performance computing company Mellanox for $6.9 billion

Kenny Grant
March 12, 2019

Nvidia's acquisition of Mellanox would also represent a win for activist hedge fund Starboard Value LP, which is a shareholder of the company and reached a deal with it a year ago over the composition of its board. Jensen Huang, CEO of Nvidia, said the acquisition of Mellanox is aimed at addressing "holistic architectures that connect vast numbers of fast computing nodes over intelligent networking fabrics to form a giant datacenter-scale compute engine". This time the action takes place in the supercomputer / high performance computing (HPC) segment.

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 is also a fabless semiconductor company that is apparently interested in snatching up its fellow chipmaker.

Nvidia and Intel, as is usual for the companies, have refused to speculate on the sources' claims, but an announcement from the successful bidder is expected early this week.

Nvidia's advantage is that it would have a greater chance of obtaining US and Chinese regulatory approval as Intel and Mellanox control the market for InfiniBand technology, a networking communications standard commonly used in supercomputers, Calcalist said.

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Mellanox, originally founded in Israel, has a long history of collaboration and joint innovation with Nvidia. Intel and Mellanox did not immediately respond to requests for comment. We should expect this deal to cement in this week, leading directly into NVIDIA's biggest event of the year: the GPU Technology Conference, or GTC.

The deal is expected to close by the end of 2019. In the wake of its trade row with the United States, China has previously moved to thwart non-Chinese chip M&A deals.

Both Nvidia and Mellanox contributed to the creation of two supercomputers operated by the U.S. Department of Energy and between them power over 250 of the world's 500 most powerful supercomputers.

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