Nvidia has acquired the Israeli chip company Mellanox Technologies outbidding Microsoft, Intel and Xilinx. In a bidding war against Intel’s six billion dollar offer, it has offered seven billion dollars leading to its victory. Nvidia is a California-based company engaged in designing graphics processing units (GPU) for gaming along with being a chipmaker for computers and automobiles. Mellanox is a networking company predominantly involved in making chips using InfiniBand and Ethernet with customers including Alibaba and Dell. This win against Intel could move Nvidia ahead in the market. Additionally, the technology that Mellanox deals in shall open new doors for Nvidia.
This acquisition would be beneficial to both companies. Mellanox has been in the market for over two decades and has built a robust consumer base that gives Nvidia the scope of expanding its reach. With access to Mellanox’s technology, Nvidia will be able to expand its reach further into the realm of cloud installations. The combination of the two systems might not propel the growth of Nvidia in the gaming industry as much as it would enhance the company’s computing systems. It witnessed a decline in demand for chips in the Chinese gaming industry and recorded low data center sales last year. With the purchase of Mellanox, Nvidia aims to optimize its computing solutions and take the lead in the market. The newly acquired technology will further allow Nvidia to explore the autonomous vehicles, robotics and networking industry.
Although, Nvidia has made an impact on the gaming industry, the tech offered by Mellanox could help it in improving its data centers. Mellanox also has a base in Israel, which shall give Nvidia a new region to explore. This deal shall give Nvidia the lead in the industry against other tech giants like Intel and Microsoft.