What do Microsoft, Intel, Xilinx and now Nvidia have in common? They are all courting Mellanox

GPU powerhouse reportedly throws down $7bn for networker

Ethernet and InfiniBand networker Mellanox has reportedly received a $7bn acquisition bid from GPU powerhouse Nvidia.

This tops the Intel bid of $6bn we reported in January.

Activist investor Starboard Value became involved with Mellanox in 2017, reckoning the shares had under-performed relative to the value of the company. The pushy investor instigated board-level changes in the summer of 2018.

Mellanox's revenues and profits have since risen, as the chart shows:

Click to enlarge

The 2017 revenue dip, when Starboard Value took a stake in Mellanox, can also be clearly seen.

Since then an investment banker has reportedly been hired, and Microsoft, Xilinx and Intel have all expressed interest in buying the Israeli data centre kitmaker.

Nvidia is capitalised at $91bn, and Mellanox at $5.9bn – with its shares priced at $109.38 – a sprat in comparison.

Nvidia's GPUs are being used for AI and machine learning, but custom CPUS are being developed to do such work more efficiently and at lower cost, for example, Graphcore.

Mellanox's Ethernet and InfiniBand networking technology and products would make a timely addition to Nvidia's GPU and NVLink portfolio. The American chip giant could extend the reach of its GPU systems – with Mellanox's internal NVLInk connectivity – to x86 application servers, for example. ®