US gaming giant Nvidia reportedly bidding to buy Israel chipmaker Mellanox
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US gaming giant Nvidia reportedly bidding to buy Israel chipmaker Mellanox

Offer reportedly joins those of other tech giants, including Intel, seeking to purchase the Yokne’am-based maker of servers and storage switching solutions, Calcalist website says

Nvidia's founder and CEO Jensen Huang speaking at the firm's GTC developers conference in Tel Aviv on October 18, 2017 (Courtesy)
Nvidia's founder and CEO Jensen Huang speaking at the firm's GTC developers conference in Tel Aviv on October 18, 2017 (Courtesy)

US gaming and computer graphics giant Nvidia Corp. has offered to buy Israeli chip maker Mellanox Technologies Ltd., the Calcalist financial website reported Sunday without saying where it got the information.

The bid reportedly joins that of other tech giants that are also reportedly seeking to acquire the Yokne’am, Israel-based maker of servers and storage switching solutions. These reportedly include Microsoft, Intel Corp. and US tech firm Xilinx Inc.

Intel has already offered to pay $6 billion for Mellanox, Calcalist said, estimating that any final acquisition deal would likely be some 10 percent higher than the Intel bid. Mellanox shares are traded on the Nasdaq at a company valuation of $5.9 billion, after the share surged 51% in the past 12 months amid speculation of an acquisition and as the firm reported record revenues in 2018.

Calcalist said that Nvidia would have an advantage over Intel in its bid, as it would have a greater chance of getting both US and Chinese regulatory approvals, given that Intel and Mellanox control the market for InfiniBand technology, a computer-networking communications standard that is used in high performance computers.

A spokesman for Mellanox declined to comment.

In January, Mellanox reported record revenues, which in 2018 crossed the $1 billion mark for the first time in the firm’s history, as clients demand higher speeds for their cloud platforms, AI computations and data centers.

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. As of August 2018, the company had invested some “tens of millions of dollars” in three startups: Zebra Medical, the maker of a medical imaging insight software using artificial intelligence; Deep Instinct, which uses deep learning to predict cyber-threats; and Rocketick, a simulation and chip testing company that was then bought by Cadence in 2016 for a reported $40 million.

Nvidia has an R&D center in Israel that employs some 20-30 workers. In October, the US firm said it was planning to set up a research center in Israel that will focus on artificial intelligence.

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