Nvidia acquires networking specialist Mellanox

Nvidia and Intel are reportedly in a battle for control of Israeli chipmaker Mellanox Technologies, with Nvidia claimed to have the lead bid for ownership of the company.

Founded in 1999, Mellanox Technology is one of the world's leading producers of high-speed networking components - including silicon - using Ethernet and InfiniBand standards. The company has traditional ties to Intel: The Mellanox founding team was made up of former executives from Intel and Galileo Technology, the latter now a part of the Marvell Technology Group, but today works in direct competition to Intel on Ethernet, InfiniBand, and silicon photonics projects.

There's a chance that the Mellanox could be returning to the fold, however: Reports have begun to circulate that Intel has been bidding to acquire Mellanox, but the most recent of these warns that it is being outbid by Nvidia as the company looks to extend its efforts in the high-performance computing (HPC) market.

According to anonymous sources speaking to newswire service Reuters, Mellanox has been offered a deal in excess of $7 billion in cash (around £5.4 billion) from Nvidia - which, if accurate, would represent the largest acquisition in the company's history. This, the source further details, represents a premium above an earlier bid placed by Intel, and a significant premium over Mellanox' current market cap.

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.

UPDATE 1130:

Nvidia has confirmed that its bid for Mellanox, which stands at $6.9 billion, has been accepted, leaving Intel in the cold. 'The emergence of AI and data science, as well as billions of simultaneous computer users, is fuelling skyrocketing demand on the world’s data centres,' says Nvidia founder and chief executive Jensen Huang of the motivation behind what is Nvidia's largest ever acquisition. 'Addressing this demand will require holistic architectures that connect vast numbers of fast computing nodes over intelligent networking fabrics to form a giant data centre-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 data centre-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,' adds Eyal Waldman, founder and chief executive of Mellanox. 'Combining our two companies comes as a natural extension of our long-standing 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.'