Nvidia to acquire Mellanox for US$6.9bn - General Business

Nvidia to acquire Mellanox for US$6.9bn - General Business

Nvidia to acquire Mellanox for US$6.9bn - General Business

Further reports have suggested that Nvidia would be willing to pay 10% on top of Intel's current bid, meaning the Santa Clara-based GPU-maker could be considering paying up to US$6.6 billion for Mellanox.

Nvidia is set to acquire data center chipmaker Mellanox for around $7bn after reportedly outbidding Intel, accounts have claimed.

"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. Mellanox also gives Nvidia access to the high-speed networking market.

Nvidia cut its fourth-quarter revenue estimate by half a billion dollars in January because of weak demand for its gaming chips in China and lower-than-expected data center sales.

"Intel losses market shares to Nvidia in the computing side", said Jeremie Capron, head of research at ROBO Global, which runs a robotics and AI- focused exchange-traded fund under the ticker "ROBO".

This is being seen as a cunning plan to reduce Nvidia's dependence on the video game industry.

Nvidia's DGX system is an artificial intelligence computer in a box, while Mellanox has a growing business selling complete switches, which could be combined with Nvidia's boxes, Wheeler said. Mellanox itself is renowned for being one of the world leaders in the field as well, supplying networking products using InfiniBand and Ethernet technology.

The deal follows a competitive bidding process which according to sources familiar with the matter, included rival chipmakers such as Intel and Xilinx Inc.

"It's hard to not think Nvidia is just buying some revenue to help its case" in the data centre space, said Jason Carolan, chief innovation officer of Flexential, which operates data centres for big businesses and is a Nvidia customer.

Goldman Sachs served as exclusive financial adviser to Nvidia, while Credit Suisse Group and JPMorgan Chase & Co. advised Mellanox. Such products are used in data centers cloud and storage, as well as for high-performance supercomputers used for AI and other types of data-intensive computing.

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