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Nvidia drops big chunk of change to round out its data center strategy

Nvidia data center strategy

Today, Nvidia, the Santa Clara, CA-based technology company best known for popularizing the GPU (Graphics Processing Unit), announced that it will purchase Mellanox Technologies for a whisker under $7 billion. Nvidia will pay $125 per share for the provider of fast interconnect products, which is a fifteen percent (15%) premium over its closing price on Friday.

Nvidia outbid chipmaker rival Intel and sees the purchase of Mellanox and its InfiniBand interconnect technology as the perfect complement to its computing platform. Mellanox, which generated revenues of approximately $1 billion in 2018, pioneered InfiniBand (IB), which, along with its Ethernet products, are used in over half the world’s supercomputers and in many hyperscale data centers.

With the Mellanox purchase, Nvidia will be able to optimize data center-sized workloads across the entire networking, compute and storage stacks, resulting in greater utilization, higher performance and lower operating costs for customers. Both companies are counting on their performance-centric cultures to make integration seamless.

Definitely not hostile

Nvidia and Mellanox have been working together for years. In fact, they collaborated on building Sierra and Summit, the two (2) fastest computers in the world, both of which are utilized by the U.S. Department of Energy. In addition, most of the world’s top cloud providers use both Nvidia GPUs and Mellanox interconnects.

According to Nvidia CEO Jensen Huang, “The emergence of AI and data science, as well as billions of simultaneous computer users, is fueling skyrocketing demand on the world’s datacenters. Addressing this demand will require holistic architectures that connect vast numbers of fast computing nodes over intelligent networking fabrics to form a giant data center-scale compute engine.

“We’re excited to unite Nvidia’s accelerated computing platform with Mellanox’s world-renowned accelerated networking platform under one roof to create next-generation datacenter-scale computing solutions. I am particularly thrilled to work closely with the visionary leaders of Mellanox and their amazing people to invent the computers of tomorrow.”

According to Mellanox founder and CEO Eyal Waldman, “We share the same vision for accelerated computing as Nvidia. Combining our two companies comes as a natural extension of our longstanding partnership and is a great fit given our common performance-driven cultures. This combination will foster the creation of powerful technology and fantastic opportunities for our people.”

In the opening minutes of today’s trading, Nvidia’s shares were market 0.25% higher and traded at $151 each. Mellanox shares rose 8.8% to $119 each, a move that would increase their six-month gain over 55%.

Looking to transform and modernize your data center?

If you’d like to learn about how GDT’s design engineers and solutions architects turn traditional data centers into innovative, agile machines that make customers more competitive, help them bring applications to market faster, and deliver a superior customer experience, contact them at or They help customers enjoy an agile, service-oriented data center that’s highly automated and virtualized, and can easily scale up or down to perfectly accommodate their needs.

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