Jensen Huang, the founder and CEO of US gaming and computer graphics giant Nvidia Corp., said on Monday that Mellanox Technologies Ltd., the Israeli company the firm is acquiring, will operate as an independent unit within the US firm and that all of its employees will be retained.
“Mellanox is going to be standalone entity here in Israel,” Huang said at a press conference at the Mellanox Israel headquarters in the northern town of Yokne’am. “We will continue to grow it.”
Huang added that Nvidia intends to continue manufacturing “every single one of Mellanox product lines,” which are “treasured and coveted” by the US firm, and that there will be “absolutely no layoffs” of Mellanox employees.
Not only does the firm intend to “keep every single employee,” it also plans to grow the workforce locally, he said, and to continue to invest in the company.
Eyal Waldman, the CEO and founder of Mellanox, will continue managing Mellanox within Nvidia, he said, resolving uncertainty regarding Waldman’s future at the firm.
“It is our intention and my hope that Eyal will lead Mellanox Israel,” said Huang. “That would give me nothing but joy and would bring me great honor to build this amazing company with him.”
Waldman confirmed soon after that he plans to work with Huang to create a “very successful” joint company.
Earlier this month the US firm signed a deal to buy the Yokne’am, Israel-based Mellanox for $6.7 billion, in the second largest tech deal in Israel and the third largest acquisition of an Israeli firm, according to data compiled by IVC Research Center, which tracks Israel’s tech industry.
Mellanox, with headquarters in Yokne’am and Sunnyvale, California, is a maker of high-speed servers and storage switching solutions that allow massive amounts of data to move within and between computers. The products developed by the firm, a pioneer in InfiniBand and Ethernet technologies, are used in supercomputers globally. Mellanox specializes in tech that moves massive amounts of data around within computers and between computers.
The transaction has been approved by the boards of directors of the two companies and is expected to be closed by the end of 2019, subject to regulatory approvals and the approval of Mellanox shareholders.
Waldman said that Mellanox and Nvidia will continue to invest in startups in Israel and “help them flourish and take them to market.” Nvidia has been active in Israel for the past nine years, both selling its processors locally and buying stakes in startups and setting up an R&D unit.
The deal is Nvidia’s biggest acquisition to date. The firm traditionally grows its own technologies as it caters to new markets and new needs, Huang explained. However, it decided to buy Mellanox because the firm is “one of the world’s great treasures.”
Expressing mutual love
Huang said that the acquisition is important for Nvidia, as it will allow the US firm to extend its reach from servers to data centers, which will become ever more important as global use of artificial intelligence, machine learning and data analytics require more and more data and computing power. The two companies are “perfectly complementary” with one another, he said.
The acquisition process was “supremely competitive,” Huang said, adding that Waldman was a “tough negotiator.” Nvidia reportedly competed against Intel Corp, Microsoft, and US tech firm Xilinx Inc. for Mellanox.
The two men — Waldman dressed in a light blue shirt and jeans and Huang in his traditional leather black jacket and black chinos — joked about how during the negotiations the two had exchanged “interesting phone calls.”
“I had to call him every day to tell him I loved him. He was the first person I spoke to in the morning, he was the last person I spoke to at night,” Huang said.
“Now I miss the phone calls,” a smiling Waldman retorted.