NVIDIA to acquire Mellanox for $6.9 billion

13 Mar 2019

Unites leading players in processing and interconnect for the high performance computing, data center markets.

NVIDIA, a US designer of graphics processing units and system-on-chip units for mobile computing and automotive markets is to acquire Mellanox, an Israeli-headquartered developer of Ethernet and InfiniBand smart interconnect for servers and storage. Under the terms of the acquisition, NVIDIA will acquire all shares of Mellanox for $125 each in cash, valuing the deal at approximately $6.9 billion.

NVIDIA stated: “Once complete, the combination is expected to be immediately accretive to NVIDIA’s non-GAAP gross margin, non-GAAP earnings per share and free cash flow.”

The acquisition unites two of the world’s leading companies in high performance computing; NVIDIA stated, “Together, our computing platform and Mellanox’s interconnects power over 250 of the world’s TOP500 supercomputers and have as customers every major cloud service provider and computer maker.”

The data and compute intensity of modern workloads in AI, scientific computing and data analytics is growing exponentially and imposes enormous performance demands on hyperscale and enterprise datacenters.

NVIDIA’s purchase statement added, “While computing demand is surging, CPU performance advances are slowing as Moore’s law has ended. This has led to the adoption of accelerated computing with NVIDIA GPUs and Mellanox’s intelligent networking solutions.

Optimizing datacenter workloads

“Datacenters in the future will be architected as giant compute engines with tens of thousands of compute nodes, designed holistically with their interconnects for optimal performance. With Mellanox, NVIDIA 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.”

Mellanox pioneered the InfiniBand interconnect technology, which along with its high-speed Ethernet products is now used in over half of the world’s fastest supercomputers and in many leading hyperscale datacenters.

Jensen Huang, founder and CEO of NVIDIA, commented, “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. “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.”

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 US Department of Energy. Many of the world’s top cloud service providers also use both NVIDIA GPUs and Mellanox interconnects. NVIDIA and Mellanox share a common performance-centric culture that will enable seamless integration.

Once the combination is complete, NVIDIA intends to continue investing in local excellence and talent in Israel, one of the world’s most important technology centers. Customer sales and support will not change as a result of this transaction.