Nvidia has purchased Mellanox Technologies in a major deal expected to significantly further the company’s data center aspirations. The $6.9B purchase price is by far the largest acquisition in Nvidia’s history and Team Green beat out at least two other interested companies, Microsoft and Intel, for the purchase.
Jen-Hsun Huang, CEO of Nvidia, explained Nvidia’s rationale for the purchase thusly:
The strategy is doubling down on datacenters, and we are combining and uniting two leaders in high performance computing technologies. We are focused on accelerated computing for high performance computing, and Mellanox is focused on networking and storage for high performance computing, and we have combined the two companies under one roof. Our vision is that datacenters are the most important computers in the world today…
[O]ver the past several years, the emergence of artificial intelligence and machine learning and data analytics has put so much load on the datacenters, and the reason is that the data size and the compute size is so great that it doesn’t fit on one computer. So it has to be distributed on multiple computers and the high performance connectivity to allow these computers to work together is becoming more and more important. This is why Mellanox has grown so well, and why people are talking about SmartNICs and intelligent fabrics and software defined networks. All of those conversations lead to the same place, and that is a future where the datacenter is a giant compute engine that will be coherent – and it will allow for many people to still share it – but allow for few people to run very large applications on them as well.
So, what would Nvidia do with a networking company? Imagine the possibility of combining NVLink — Nvidia’s high-speed protocol for intra-GPU communication — with Mellanox’s networking and server products. The end result could be distributed GPU clusters capable of running workloads across entirely different machines. This would never work in a video game, where the latencies associated with cross-system communication would be too high for smooth frame rates, but it could work beautifully in any workload that allowed for more relaxed timing.
Even if Nvidia doesn’t explicitly repurpose Mellanox’s networking technology for distributed GPU clusters of this type, it still owns another piece of the data center puzzle at a time when data center markets have been enjoying long-term robust growth and are expected to continue growing in the future as the IoT scales up and more enterprises shift to the cloud. Mellanox was arguably well positioned to take advantage of this growth before being acquired, and those benefits will flow to Nvidia now.
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