Mellanox is based in both the U.S. and Israel where it makes high-speed network connecting servers, with a market cap at the end of trading on Friday of around $5.9 billion.
Further reports have suggested that Nvidia would be willing to pay 10% on top of Intel's current bid, meaning the Santa Clara-based GPU-maker could be considering paying up to US$6.6 billion for Mellanox.
The deal will help Nvidia to better compete in the data centre market, which now accounts for around a third of its sales.
[O] ver the past several years, the emergence of artificial intelligence and machine learning and data analytics has put so much load on the datacenters, and the reason is that the data size and the compute size is so great that it doesn't fit on one computer. Now, it's reportedly about to expand its portfolio by acquiring Mellanox Technologies Inc. with a bid of over $7 billion.
Intel and Mellanox have said absolutely nothing about the deal but then that is to be expected. Xilinx is also a fabless semiconductor company that is apparently interested in snatching up its fellow chipmaker. 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.
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Jensen Huang, CEO of Nvidia, said the acquisition of Mellanox is aimed at addressing "holistic architectures that connect vast numbers of fast computing nodes over intelligent networking fabrics to form a giant datacenter-scale compute engine".
FILE PHOTO - The logo of Nvidia Corporation is seen during the annual Computex computer exhibition in Taipei, Taiwan May 30, 2017.
Add it up and Nvidia with Mellanox can better optimize systems.
This deal only increases the competitive rivalry between NVDA and INTC to go beyond GPUs to include Infiniband and Ethernet.
'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.