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US technology firm to buy Israeli chipmaker Mellanox for $6.9 billion

It is the biggest-ever acquisition by Nvidia as it pushes into the market for data center components.

By World Israel News Staff

The American Nvidia Corporation has agreed to buy Israeli chipmaker Mellanox Technologies Ltd. for $6.9 billion, the companies announced Monday.

The move allows Nvidia to gain expertise to help it push into the growing market for data center components, reports Bloomberg.

The acquisition was said to have been approved by the board of directors of each company, though it remains contingent upon receiving regulatory approvals, including the endorsement of the Mellanox shareholders.

It is the biggest-ever acquisition by Nvidia.

“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,” Nvidia’s CEO Jensen Huang said in a statement.

Huang, the company’s founder, built a multi-billion-dollar business in under three years by persuading owners of data centers that his graphics chips are the right solution for processing the increasingly large amounts of information needed for artificial intelligence work, such as image recognition, reports Bloomberg.

“The data center is more important than ever,” Huang said in an interview with the business news outlet. “This combination allows us to innovate faster,” he added.

Mellanox is based in Yokneam, Israel, with operations in Sunnyvale, California, as well.

Nvidia employs several dozen people in Israel after opening a research and development center in the Jewish State in 2017.

Mellanox’s stock has risen by almost 66% since the company’s low point in October 2018 was turned around following its report of a fifth consecutive quarter of record results. Nvidia had $2.9 billion in sales from its data center unit last year, up from $830 million two years earlier, Bloomberg noted.