Nvidia announced Monday it has acquired chipmaker Mellanox in a $6.9 billion transaction, beating out rival bids from Microsoft and other companies. In a press release today, Nvidia said it will purchase Mellanox entirely in cash, making this the biggest acquisition in the company's history.
While Nvidia is best known as maker of graphics cards (GPUs) for high-end gaming performance, Mellanox is an Israel and California-based company specializing in networking and supercomputer chips.
The company's manufacturers Ethernet and InfiniBand solutions for cloud and data centers, and has increasingly moved into powering artificial intelligence (AI). Mellanox says it has developed processors for 250 of the top 500 most powerful supercomputers.
“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 Nvidia founder and CEO Jensen Huang in a statement. “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.”
Nvidia bested some major tech players to acquire Mellanox. Giants such as Microsoft, Broadcom, and Intel were all potential buyers, but Nividia reportedly made a last day bid that topped their rivals.
Mellanox would have arguably been a good buy for Microsoft as it supplies chips for the company's Azure services. However, Nvidia's $125 per share bid ultimately proved too rick for Microsoft's needs.
“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 Huang.