Nvidia outbids Intel for Mellanox

Nvidia knocked out Intel in its bid to buy the Israel chipmaker Mellanox. As Fred Katayama reports, the $6.8 billion deal will help Nvidia boost its business of making data center chips that help power cloud computing.

(REUTERS / INTEL / MELLANOX) – Nvidia knocked out rival Intel in a deal that’ll boost its data center business. It’s buying Israeli chip designer Mellanox Technologies for nearly $7 billion. Its cash offer carries a 14 percent premium.

Mellanox makes chips and other hardware for data center servers that power cloud computing. Analysts say Nvidia can benefit from Mellanox’s expertise in networking and connectivity, two areas the American chip maker has been trying to bolster. Data center revenue makes up about a third of Nvidia’s sales.

The deal comes just as fast-growing Nvidia has been hit hard by weak demand for its gaming chips in China and the fading craze over cryptocurrencies.

In addition to Intel, Xilinx was also reportedly bidding for Mellanox. No comment from Intel or Mellanox about a bid. Their stocks rose Monday as well as those of Mellanox and Nvidia.

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