Nvidia buys Mellanox for RM28b in data centre push

SAN FRANCISCO • Nvidia Corp agreed to buy chipmaker Mellanox Technologies Ltd for US$6.9 billion (RM28.22 billion), gaining expertise to help it push into the growing market for data-centre components.

Santa Clara, California-based Nvidia is paying US$125 a share in cash for the American-Israeli company, which makes chips used to speed the flow of information across computer servers. That’s a 14% premium to last Friday close of US$109.38 with the target’s shares surging in pre-market trade yesterday.

Nvidia’s biggest-ever acquisition is aimed at accelerating momentum for one of CEO Jensen Huang’s most successful initiatives.

The company’s founder built a multibillion-dollar business in under three years by persuading owners of data centres that his graphics chips are the right solution for processing the increasingly large amounts of information needed for artificial intelligence work, such as image recognition.

“The data centre is more important than ever,” Huang said in an interview. “This combination allows us to innovate faster.”

Nvidia is said to have won a bidding process, beating out rivals including Intel Corp.

Mellanox’s market value, now at about US$5.9 billion, started to run up last year when activist investors took stakes and talk that it was up for sale emerged.

Shares of the company, which is based in Yokneam, Israel, and Sunnyvale, California, have risen 66% from their October trough and 18% just this year. — Bloomberg