NVIDIA Acquires Mellanox, Planting Foot Even Firmer In Lucrative Datacenter Market

At last check, it looked as though Intel was going to win its bid to acquire networking giant Mellanox. This past weekend, though, the rumor mill was active with word that NVIDIA was instead the victor, and fortunately for the world watching, the company wasted no time in making its move official. All told, NVIDIA is shelling out $6.9B for the company, representing all issued and outstanding shares at $125 a pop.

At $6.9B, this acquisition is easily NVIDIA’s biggest. For gamers, it might seem a little questionable, and perhaps even instill a little fear that the company is going to be focusing its attention less on gaming, and more on enterprise. I’m of the mind that nothing is going to change on the gaming side of things. The company is still the leader for discrete graphics, and it actively conjures up exciting cutting-edge features for PC gamers. It’s a big name, and PC gaming still delivers huge revenue for the company.

NVIDIA explains its reasons for the acquisition

Some key points from the press release:

An early innovator in high-performance interconnect technology, 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.

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.

What this acquisition will do for NVIDIA is plant its foot even firmer in the enterprise market. It’s well known that a massive chunk of NVIDIA’s business is from the enterprise, and the company has made that happen through its GPUs as well as its workstation and server platforms. Not to mention software. CUDA is already dominant in many parts of the market; with networking expertise now in tow, it means NVIDIA can continue to grow in what’s an extremely important market. InfiniBand is a massive name, and now it’s going to have NVIDIA’s tied in with it.

NVIDIA’s Tesla V100 Datacenter GPU

The good thing for NVIDIA is that it is already intimately familiar with Mellanox, as it’s been a partner for many years. Eyal Waldman, Mellanox’s CEO and founder, said this about the deal: “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 timing of this announcement is notable on account of the fact that NVIDIA’s GPU Technology Conference takes place next week. It seems likely that NVIDIA really wanted the deal to clear before then, so it had another major piece of news to share. We’ll be at the event, and we’re eagerly awaiting other juicy bits of information that will come out during the week.