In a bid to boost its data centre business Nvidia is said to have issued a bid to acquire Mellanox Technologies.
What is Mellanox Technologies and why does Nvidia want to acquire it?
Mellanox is based out of Israel and the US, and manufactures technology for data centres including switches, network adapters and silicon.
At the weekend it was reported that Nvidia had issued a bid to acquire the firm with a source close to the matter telling Reuters that the deal was worth $7 billion.
That’s a hefty fee if it is accurate as Mellanox had a market cap of $5.9 billion on Friday.
The big question is why would Nvidia want to acquire a networking firm with its hugely popular GPU line-up? Quite simply, GPUs aren’t the money makers they once were.
At the start of the year Nvidia cut fourth quarter revenue estimates by as much as half a billion dollars. This is due, in part, to low demand for GPUs and a slowing data centre business.
Being able to diversify its product line-up then might be a good idea for Nvidia but it’s not alone eyeing Mellanox.
Intel has also issued a bid for Mellanox although a source close to the matter has said that Nvidia’s bid is larger than Intels.
Will Team Green beat Team Blue in the bid for Mellanox? Something tells us we won’t have to wait long to find out.