NVIDIA and Mellanox announced Monday that an agreement has been reached for NVIDIA to acquire Mellanox for approximately $6.9 billion, uniting two of the world's leaders in high-performance computing. NVIDIA reportedly beat out two other interested suitors—Microsoft and Intel—for the purchase.
In a joint press release, the companies stated that NVIDIA's computing platform and Mellanox's interconnects power more than 250 of the worlds TOP500 supercomputers, and have every major cloud service provider and computer maker as their customers.
"The data and compute intensity of modern workloads in AI, scientific computing and data analytics is growing exponentially and has put enormous performance demands on hyperscale and enterprise datacenters," the release said. "While computing demand is surging, CPU performance advances are slowing as Moore’s law has ended. This has led to the adoption of accelerated computing with NVIDIA GPUs and Mellanox’s intelligent networking solutions. Datacenters 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."
Founded in 1999, Mellanox Technologies is headquartered in Sunnyvale, CA and Yokneam, Israel. It had 2018 full-year sales of $1.089 billion—its first time topping $1 billion in annual revenue—up 26.0% from 2017. It had 2018 full-year total profit of $134.3 million, compared to a $19.4 million loss in 2017. Q4 2018 sales of $290.1 million jumped 22.1 percent year-over-year, with total profit of $42.8 million. It pioneered the InfiniBand Interconnect technology, while also finding success with its high-speed Ethernet products.
Prominently known as one of the top suppliers to the electronic gaming industry, Santa Clara, CA-based NVIDIA designs graphics processing units for the gaming and professional markets, as well as system-on-a-chip units for the mobile computing and automotive market. The company had 2018 full-year sales of $11.772 billion, up 21% from 2017, while total profit of $4.1 billion jumped 36%. However, fourth quarter sales of $2.21 billion were down 24% year-over-year and down 31% from Q3.
“This was a turbulent close to what had been a great year,” NVIDIA founder and CEO Jensen Huang said in the company's Q4 earnings release. “The combination of post-crypto excess channel inventory and recent deteriorating end-market conditions drove a disappointing quarter.
The Mellanox acquisition is NVIDIA's biggest purchase in its 20-year history. NVIDIA said the addition will optimize datacenter-scale workloads across the entire computing, networking, and storage stack to achieve higher performance, greater utilization, and lower operating cost 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 datacenters,” Huang said in Monday's announcement. “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. 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 datacenter-scale computing solutions. I am particularly thrilled to work closely with the visionary leaders of Mellanox and their amazing people to invent the computers of tomorrow.”
