Nvidia could soon acquire data center chipmaker Mellanox Technologies Ltd for over $7bn in cash according to one person familiar with the bidding process between the two companies and Intel.
The deal would be the graphics card maker’s largest acquisition ever as it looks to help expand its business beyond the video game industry and into the data center market.
A source with information on the deal told Reuters that Nvidia had outbid rival chipmaker Intel in the auction for Mellanox and that a deal could be announced this week.
Mellanox is based in Israel and the US and the company’s chips are used to power high-speed networks connecting servers.
Data center revenue now accounts for almost a third of Nvidia’s sales. The company has expanded its presence into new markets under Jensen Huang’s leadership but slowing sales in China and the end of the cryptocurrency fad have both cut into its sales recently.
Lower than expected data center sales combined with weak demand for its graphics cards in China led Nvidia to cut its fourth-quarter revenue estimate by half a billion dollars.
Acquiring Mellanox could provide the boost the company needs while helping it differentiate its offerings beyond graphics cards even further.
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