More than $7 billion NVIDIA is close to acquiring server chip maker Mellanox

  Beijing time on March 11th, informed sources said on Sunday that chip maker Nvidia is close to more than $7 billion in cash to acquire Israeli server chip maker Mellanox Technologies.

This will be the largest acquisition in the history of Nvidia, which will boost NVIDIA's server chip manufacturing business, thereby reducing its reliance on the video game industry.

According to people familiar with the matter, Nvidia’s bid for the sale of Mellanox exceeded Intel’s, and the deal will be announced as soon as Monday. Intel and Mellanox have not commented. Nvidia declined to comment. Calcalist, a financial news website, reported earlier on Sunday that Nvidia’s bid for Mellanox exceeded Intel’s.

Mellanox's chips drive servers connected to high-speed networks. The company is headquartered in Israel and has offices in the United States. As of the close of the stock market last Friday, Mellanox has a market capitalization of about $5.9 billion.

Data center revenues accounted for nearly a third of NVIDIA's total revenue. In the past few years, under the leadership of CEO Jensen Huang, NVIDIA has achieved rapid growth, but the slowdown in China's business growth and the cooling of the cryptocurrency boom began to put pressure on the company's revenue in recent quarters.

Nvidia's current market capitalization is $91 billion. In January of this year, its fourth-quarter revenue forecast was lowered by $500 million due to weak demand for game chips in China and lower-than-expected data center sales. NVIDIA's acquisition of Mellanox is also a major victory for the rights defense hedge fund Starboard Value LP. Starboard is a shareholder of Mellanox, and the two parties reached an agreement on the composition of the Mellanox board last year.