Nvidia Mellanox acquisition cost $6.9 billion; will help invent the “computers of tomorrow”

Nvidia Mellanox acquisition will cost the computer graphics giant almost $7 billion. The purchase was announced today on the company’s website. The acquisition combines one of America’s most well-known technology companies with one of their longtime partners, Israeli networking company Mellanox.

According to Nvidia, the two companies collectively run over 250 of the world’s top 500 supercomputers. Nvidia claims their customers include every major cloud service and computer manufacturers. The partnership between the two companies has led to the world’s two fastest supercomputers, named Sierra and Summit. It claims that the biggest cloud service providers in the world use the combined services of Nvidia’s GPUs and Mellanox interconnects. Nvidia believes that, with their acquisition of Mellanox, they will be able to optimize datacentre-scale workloads to “achieve higher performance, greater utilization and lower operating cost for customers.”

Founder and CEO of Nvidia Jensen Huang detailed the motivation behind the move, “The emergence of AI and data science … is fueling skyrocketing demand on the world’s datacenters … Addressing this demand will require holistic architectures that connect vast numbers of fast computing nodes over intelligent networking fabrics to form a giant datacenter-scale compute engine.” Huang added, “We’re excited to unite NVIDIA’s accelerated computing platform with Mellanox’s world-renowned accelerated networking platform under one … I am particularly thrilled to work closely with the visionary leaders of Mellanox and their amazing people to invent the computers of tomorrow.”

Founder and CEO of Mellanox Eyal Waldman stated, “We share the same vision for accelerated computing as Nvidia … Combing our two companies comes as a natural extension of our longstanding partnership.”

The financial terms of the acquisition involved Nvidia purchasing all of the “issued and outstanding” common shares of Mellanox at a price of $125 in cash. Nvidia expects to see immediate growth to their non-GAAP (Generally Accepted Accounting Principles) gross margin, non-GAAP earnings per share and free cash flow.

Nvidia was last in the news for an upcoming book detailing its new ray tracing technology. The book aims to get more developers to adopt Nvidia’s latest development in graphics card technology. Nvidia’s financials were also recently in the spotlight. The company lowered its profit forecasts, explaining that they believe customers are waiting for products at a lower price.