Nvidia, Intel, and Xilinx in rumored bidding contest for Mellanox

Daniel Fowler
March 11, 2019

NVIDIA is reportedly eying off an acquisition of Mellanox for a huge $7 billion, according top sources familiar with the matter reports Reuters. Nvidia's acquisition of Mellanox would also represent a win for activist hedge fund Starboard Value LP, which is a shareholder of the company and reached a deal with it past year over the composition of its board.

Nvidia Corp said on Monday it will buy Israeli chip designer Mellanox Technologies Ltd for $6.8 billion in cash, a deal that would help the USA chipmaker boost its data center business.

"Intel losses market shares to Nvidia in the computing side", said Jeremie Capron, head of research at ROBO Global, which runs a robotics and AI- focused exchange-traded fund under the ticker "ROBO".

Bernstein analyst Stacy Rasgon said Nvidia has been pushing more into networking and connectivity with its own tailored solutions and Mellanox would bring further expertise.

An Nvidia building in Santa Clara CA. <a href=
An Nvidia building in Santa Clara CA. Deposit

"The deal will give Nvidia an even bigger market share in the data-center market", he said.

Invidia has a market cap of $91.3 billion, following a 38% decline in its share price over the past year.

Nvidia is set to make the biggest acquisition in its history.

Nvidia says that going forward, with Mellanox onboard, it'll be able 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". 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 latter company made over US$1 billion in revenue in 2018, with US$290 million of that coming in the fourth quarter. Nvidia and Mellanox aren't strangers; they have previously worked together on several products including the likes of the Nvidia DGX-2, as well as the #1 and #2 United States supercomputers - Summit and Sierra. The all-cash acquisition is the for Nvidia, a company best known for its graphics processors for high-performance gaming.

Six Nations permutations: Ireland need a Scots favour
But despite the late surge, Scotland was unable to land the final blow and Wales finished off with a penalty in the final minute. However, Siwan Lillicrap levelled the game with a try in the 80th minute before George converted to give Wales the win.

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