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NVIDIA and Mellanox today announced that the companies have reached a definitive agreement under which NVIDIA will acquire Mellanox. Pursuant to the agreement, NVIDIA will acquire all of the issued and outstanding common shares of Mellanox for $125 per share in cash, representing a total enterprise value of approximately $6.9 billion.

Once complete, the combination is expected to be immediately accretive to NVIDIA’s non-GAAP gross margin, non-GAAP earnings per share and free cash flow.

The acquisition will unite two of the world’s leading companies in high performance computing (HPC). With NVIDIA leader in the GPU space and Mellanox leader in the high performance networking with Infiniband and all the RDMA technologies.

Together, NVIDIA’s computing platform and Mellanox’s interconnects power over 250 of the world’s TOP500 supercomputers and have as customers every major cloud service provider and computer maker.

But also outside HPC world, there is an increased need of faster computing and faster networks (with very low latency).

The data and compute intensity of modern workloads in AI, scientific computing and data analytics is growing exponentially and has put enormous performance demands on hyperscale and enterprise datacenters. While computing demand is surging, CPU performance advances are slowing as Moore’s law has ended.

This has led to the adoption of accelerated computing with NVIDIA GPUs and Mellanox’s intelligent networking solutions.

“The expanding use of AI and data science is reshaping computing and data center architectures,” said Jensen Huang, founder and CEO of NVIDIA. “With Mellanox, the new NVIDIA has end-to-end technologies from AI computing to networking, full-stack offerings from processors to software, and significant scale to advance next-generation data centers. Our combined expertise, supported by a rich ecosystem of partners, will meet the challenge of surging global demand for consumer internet services, and the application of AI and accelerated data science from cloud to edge to robotics.”

The acquisition has been finalized on April 27, 2020.