Nvidia closes in on Mellanox deal in data center push

Nvidia closes in on Mellanox deal in data center push

The agreement, which the companies described as "definitive", follows a competitive bidding process which according to sources familiar with the matter, included rival chipmakers such as Intel.

What follows are eight important things to know about the $6.8 billion Nvidia-Mellanox acquisition, including the market for Mellanox's products, what they're used for and the history of Mellanox's journey from activist investor spat to acquisition by Nvidia.

In the press-statement about the acquisition Nvidia's Jensen Huang talked about how excited he was to be able to combine Nvidia's and Mellanox's talents and technologies to create holistic compute/networking architectures "to form a giant datacenter-scale compute engine". "Both of our companies are focused on high performance computing, but neither of our companies have a giant position".

"The deal will strengthen NVDA's ability to offer datacenter-scale computing solutions optimized across computing, networking and storage, that can accelerate datacenter-scale workloads", Seyrafi said in a note distributed Monday. 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.

Nvidia's purchase of Mellanox for $6.9 billion will translate into a broader data center play for beyond the graphics and high performance computing markets.

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Mellanox has been around since 1999 and was founded by former Intel executives.

"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.

The deal will help Nvidia to better compete in the data centre market, which now accounts for around a third of its sales.

It 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. Combined, Nvidia and Mellanox power more than half of the world's top 500 supercomputers.

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