Nvidia expanding into data center space with Mellanox purchase plans

NVIDIA this week announced plans to buy chipmaker and its collaboration partner Mellanox Technologies for $6.9 billion. The move by the graphics chip giant seeks to help it push into the growing market for data center components by adding to chips that help speed the flow of information across servers.

NVIDIA’s biggest-ever acquisition to date is aimed at accelerating momentum for one of CEO Jensen Huang’s most successful initiatives, the company said. “The data center is more important than ever,” Huang’s said in an interview with Bloomberg News. “This combination allows us to innovate faster.”

NVIDIA believes the acquisition will unite leaders in processing and interconnect for the high-performance computer market, namely in healthcare. Together, NVIDIA’s computing platform and Mellanox’s interconnects power more than 250 of the world’s TOP500 supercomputers and have as customers every major cloud service provider and computer maker, NVIDIA said in a release on the deal. The company predicts “data centers in the future will be architected as giant compute engines with tens of thousands of compute nodes, designed holistically with their interconnects for optimal performance.”

Mellanox’s interconnect technology and high-speed Ethernet products are used in more than half of the world’s fastest supercomputers and in many leading hyperscale data centers. Combining their strengths, the companies seek to optimize data center-scale workloads across the entire computing, networking and storage stack to achieve higher performance, greater utilization and lower operating costs for customers.

“The emergence of AI and data science, as well as billions of simultaneous computer users, is fueling skyrocketing demand on the world’s data centers,” Huang said. “Addressing this demand will require holistic architectures that connect vast numbers of fast computing nodes over intelligent networking fabrics to form a giant data center-scale compute engine.”

The transaction needs approval from regulators, a tougher process of late in light of more complex U.S.-China trade policies. The Trump administration has recently blocked deals over concerns about China’s ambitions to acquire new semiconductor technology. Beijing also has made it harder to secure its approval for transactions.