Nvidia offers bid for Israeli chip firm Mellanox

Nvidia offers bid for Israeli chip firm Mellanox

"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 Nvidia founder and CEO Jensen Huang in a statement.

NVIDIA has announced that it plans to buy Israeli chipmaker Mellanox.

Nvidia and Intel, as is usual for the companies, have refused to speculate on the sources' claims, but an announcement from the successful bidder is expected early this week.

As part of the agreement, NVIDIA will purchase all Mellanox shares for $125 each in cash.

Mellanox makes chips and other hardware for data center servers that power cloud computing. Officials at Nvidia could not be reached for comment outside of regular USA business hours.

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

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Mellanox is traded on Nasdaq at a market cap of $5.9 billion. "It will probably spark questions as to whether Nvidia sees anything changing regarding the growth trajectory of their core data center business".

Meanwhile, with NVIDIA's own datacenter and HPC revenues growing by leaps and bounds over the last few years - thanks in big part to the machine learning boom - NVIDIA has made a decision to expand their datacenter product portfolio by picking up Mellanox.

"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.

Nvidia is set to acquire data center chipmaker Mellanox for around $7bn after reportedly outbidding Intel, accounts have claimed. It could, however, face some regulatory hurdles in China, where Mellanox has major customers such as Alibaba and Baidu. Its network tech is thus installed in "over half of the world's fastest supercomputers and in many leading hyperscale datacenters", boasts new owner Nvidia.

The agreement is a win for New York-based activist investor Starboard Value LP, which owns 5.8 percent of Mellanox and reached a deal with it previous year over the composition of its board.