Nvidia outbids Intel to buy Israel's Mellanox in data center push

Nvidia outbids Intel to buy Israel's Mellanox in data center push

The all-cash offer of US$125 per share represents a premium of 14 percent to Mellanox's Friday close.

"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".

In January, Nvidia, which has market capitalization of $91 billion, cut its fourth quarter revenue estimate by half a billion dollars because of weak demand for its gaming chips in China and lower-than-expected data centre sales.

Nvidia is the leading bidder ahead of rivals including Intel, though no final decision has been made and the outcome could still change, the sources said.

Connectivity and bandwidth are increasingly becoming a bottleneck in datacenter and artificial-intelligence applications as the size of workloads and datasets increases, according to Stacy Rasgon at Bernstein.

The two companies are also long-time partners.

Nvidia has confirmed that its bid for Mellanox, which stands at $6.9 billion, has been accepted, leaving Intel in the cold. Chips that direct that traffic have become increasingly pivotal as corporate networks and internet-based cloud service providers try to make sense of the plethora of data.

Climax of Brie Larson’s Movie Gives Out Avengers: Endgame Spoilers?
The film's long, drippy prologue is set on Hala, the home planet of the Kree civilization, a "race of noble warrior heroes". Marvel Studios had earlier revealed that Captain Marvel will be the next big thing in the Marvel Cinematic Universe .

Mellanox's networking technology is used within data centres, the remote stacks of powerful computers used by companies to store and process vast amounts of information.

The logo of Nvidia Corporation is seen during the annual Computex computer exhibition in Taipei, Taiwan May 30, 2017.

Nvidia bought Mellanox to help stitch those servers together into one giant computer, Nvidia Chief Executive Jensen Huang told Reuters in an interview.

Chinese regulators may require Nvidia to promise that Mellanox's technology will continue to work with chips from other makers, said Aaron Glick, a strategist with Cowen Inc.

Credit Suisse and JP Morgan advised Mellanox, while Goldman Sachs advised Nvidia.

In Intel's case, the tech giant was likely looking to "corner the market" with its bid as Engadget.

Related Articles