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

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Nvidia's advantage is that it would have a greater chance of obtaining US and Chinese regulatory approval as Intel and Mellanox control the market for InfiniBand technology, a networking communications standard commonly used in supercomputers, Calcalist said. We are focused on accelerated computing for high performance computing, and Mellanox is focused on networking and storage for high performance computing, and we have combined the two companies under one roof.

Nvidia, once known as a provider of gaming chips, now also provides chips to speed up artificial intelligence tasks such as teaching servers to recognise images.

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

Intel and Mellanox have said absolutely nothing about the deal but then that is to be expected. Both Intel and Nvidia already have business operations in Israel, so it would make sense for either rival to acquire a firm that could easily align with their current development programs.

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In the press-statement about the acquisition Nvidia's Jensen Huang talked about how excited he was to be able to combine Nvidia's and Mellanox's talents and technologies to create holistic compute/networking architectures "to form a giant datacenter-scale compute engine".

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.

It is expected to close by the end of 2019. So it has to be distributed on multiple computers and the high performance connectivity to allow these computers to work together is becoming more and more important. In the wake of its trade row with the United States, China has previously moved to thwart non-Chinese chip M&A deals.

Add it up and Nvidia with Mellanox can better optimize systems. Jones Day was Nvidia's legal adviser while Mellanox's lawyers were Latham & Watkins, LLP and Herzog Fox & Neeman.

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