In what may end up boosting IBM’s effort on artificial intelligence (AI), Nvidia outbids Intel to buy Israel’s Mellanox in data centre push
U.S. chip supplier Nvidia Corp has agreed to buy Israeli chip designer Mellanox Technologies Ltd for $6.8 billion, beating rival Intel Corp in a deal that would help the firm boost its data centre and artificial intelligence business.
The all-cash offer of $125 per share represents a premium of 14 percent to Mellanox’s closing price on Friday. Mellanox shares rose 8.2 percent to $118.35 and Nvidia shares gained 7 percent to $161.23 on Monday.
Nvidia, once known as a provider of gaming chips, now also provides chips to speed up artificial intelligence tasks such as teaching servers to recognise images. Mellanox makes chips that connect those servers together inside the data centre.
Nvidia bought Mellanox to help stitch those servers together into one giant computer, Nvidia Chief Executive Jensen Huang told Reuters in an interview.
IBM has collaborated with both Nvidia and Mellanox, specifically in the Power Systems line of servers capable of running artificial intelligence workloads.