Nvidia Gets China’s Approval for Mellanox Buyout

Article By : Sally Ward-Foxton

Deal ready to proceed as CEO vows ‘no job cuts due to Covid-19...

Nvidia’s purchase of Israeli data center interconnect company Mellanox has finally been given the go-ahead from the Chinese authorities, the final hurdle facing the $6.9 billion deal.

China’s State Administration for Market Regulation took more than a year to make its decision, amid the ongoing US-China trade war that previously spelled the end for Qualcomm’s bid to buy NXP.

The waiting period for US antitrust laws on the Nvidia-Mellanox deal has since expired, and antitrust approval has already been granted by the European Commission and Mexico. This means all regulatory boxes have been ticked and the acquisition is finally ready to proceed.

Data Center Synergy
Nvidia announced its intention to acquire Mellanox in March 2019 for $6.9 billion, and it was said at the time to have outbid key rival Intel for Mellanox’ data center interconnect technology. Mellanox was the pioneer of InfiniBand, but today offers both InfiniBand and high speed Ethernet including RoCE (RDMA – remote direct memory access – over converged Ethernet) solutions that span adapters, switches, software and silicon for data centers.

Nvidia is a well-known supplier of GPUs for video gaming and professional visualization systems, but an increasing part of the company’s business is from data centers. GPUs’ SIMD (single instruction, multiple data) structure is particularly suited to accelerating modern workloads related to AI and scientific computing where the performance requirements are very demanding.

Nvidia V100
Nvidia’s V100 Tensor Core GPU is an industry leader for AI acceleration in the data center (Image: Nvidia)

Nvidia and Mellanox have collaborated numerous times, notably on both Summit and Sierra, the world’s two fastest supercomputers which are both owned by the US Department of Energy. Nvidia and Mellanox technologies are in more than 250 of the world’s top 500 supercomputers, according to Nvidia, and the two companies count every major cloud service provider and computer maker amongst their customers.

The combination of the two companies will mean a more complete solution can be provided to data center customers and allow Nvidia to better compete against its main rival in this market, Intel.

The deal is expected to close on or around April 27, 2020.

No Nvidia Layoffs
Meanwhile, Nvidia CEO Jensen Huang has confirmed that the company will not see any layoffs due to negative effects on the economy during the current Covid-19 crisis.

In a letter to employees seen by EETimes, Huang noted that “nearly all industries are impacted” by Covid-19, but that many of Nvidia’s products were still in demand in key markets, with demand even rising in some markets.

“In response to the falling economy, we announced that we are pulling in our annual review process. Immediately I received questions about whether we are also planning a layoff. No – precisely the opposite. We are accelerating your raise to put some extra money in your hands. We can put tens of millions more dollars in the hands of our families in the coming months,” Huang said, in the letter.

Jensen Huang Nvidia
Jensen Huang (Image: Nvidia)

“There is no layoff. The work we do in graphics, science, AI and robotics is more vital to the future than ever. The products we offer are addressing urgent needs. Stay-at-home is driving PC sales. Remote design and collaboration technologies are needed. Gaming is replacing other entertainment and hitting record levels. The shift from physical to digital will further accelerate cloud computing use,” Huang added.

Other sectors where interest is surging, according to Huang, are robotics and healthcare. In particular, automation technologies that help workers stay safe, such as retail checkouts, warehouse robots and mobile disinfecting robots are in demand, as well as diagnostic instruments and scientific computing in the scientific and medical communities that are looking for ways to fight Covid-19.

Mellanox Acquires Titan IC
In the mean time, Mellanox announced recently that it will acquire Titan IC, the Belfast, Northern Ireland-based supplier of network intelligence technology and analytics accelerators that generate insights into data in cloud, storage and network systems.

Mellanox has already licensed Titan IC’s RXP technology to incorporate into its BlueField family of Smart NICs and I/O processing units. This RXP acceleration engine does high-speed pattern matching, real-time internet traffic inspection and detects strings, keywords and malware while freeing up CPU cores and increasing efficiency.

Together, Mellanox says it and Titan IC will be able to invest in analytics and security acceleration technologies, and eliminate boundaries between IP subsystems on their chip which can prevent the chip’s optimization. They will also be able to work across software-hardware boundaries better than they could as two separate entities, Mellanox’ VP software architecture Dror Goldenberg said, in a blog post.

Leave a comment