Nvidia acquring Mellanox Technologies for around $6.9 billion

Nvidia confirmed it will acquire Israeli chip designer Mellanox Technologies for around $6.9 billion – $125 per share in cash – reportedly outbidding Intel and Microsoft.

The all-cash offer of $125 per share is a 14% premium to Mellanox’s closing price of $109.38 on Friday and by far the largest acquisition in Nvidia’s history. 

Mellanox is an interconnect company that makes adapters, switches, software, cables and silicon for a range of markets including high-performance computing, company data centers, and cloud computing.

The deal is set to bolster Nvidia’s data center business and help boost its market share in high-performance computing. 

NVIDIA’s computing platform and Mellanox’s interconnects power more than half of the world’s 500 biggest computers, covering “every major cloud service provider and computer maker.”

NVIDIA said in a press release announcing the deal that with Mellanox it will “optimize datacenter-scale workloads across the entire computing, networking and storage stack to achieve higher performance, greater utilization and lower operating cost for customers.”

“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. I am particularly thrilled to work closely with the visionary leaders of Mellanox and their amazing people to invent the computers of tomorrow.”

“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.”