NVIDIA confirms $6.9b acquisition of Mellanox

Today NVIDIA and Mellanox announced the completion of a definitive agreement in which NVIDIA will acquire Mellanox.

This follows months of speculation involving other potential bids from the likes of Microsoft and Intel.

As per the agreement, NVIDIA will acquire all of the issued and outstanding common shares of Mellanox for US$125 per share in cash, in aggregate bringing the approximate purchase sum to a whopping $6.9 billion - NVIDIA's largest acquisition of all time.

According to NVIDIA, the companies together power more than 250 of the world's TOP500 supercomputers and have as customers every major cloud service provider and computer maker.

NVIDIA CEO and founder Jensen Huang says the data center industry is on the verge of significant change following the data and compute intensity of modern workloads in AI, scientific computing, and data analytics growing exponentially, putting enormous performance demands on hyperscale and enterprise data centers.

While computing demand is surging, CPU performance advances are slowing as Moore's law has ended, which is the niche NVIDIA is looking to to take advantage of with its accelerated computing solutions and Mellanox's networking solutions.

"The emergence of AI and data science, as well as billions of simultaneous computer users, is fueling skyrocketing demand on the world's data centers," says Huang.

"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.

Huang is confident that when complete, the acquisition will be immediately accretive to NVIDIA's non-GAAP gross margin, non-GAAP earnings per share and free cash flow.

"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 data center-scale computing solutions," says Huang.

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

Huang expects the data center of the future will be built as giant compute engines with tens of thousands of compute nodes, designed holistically with their interconnects for optimal performance. NVIDIA hopes to use its acquisition of Mellanox 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.

Fittingly, the companies have a long history of collaboration and joint innovation, reflected in their recent contributions in building the world's two fastest supercomputers, Sierra and Summit, operated by the U.S. Department of Energy

"We share the same vision for accelerated computing as NVIDIA," says Mellanox CEO and founder Eyal Waldman.

"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.