American technology giant Nvidia Corporation has signed a deal to acquire Israeli chipmaker Mellanox Technologies for $6.9 billion. Mellanox manufactures chips for data centers used for real-time online services and cloud services for some of the world’s largest companies, including Alibaba.
Nvidia’s purchase of the company comes after months of attempts by some of the world’s largest hi-tech firms, including Intel and Microsoft, to incorporate the Israeli microchip designs into their online services. Mellanox and Nvidia will control the information flow of more than 250 of the world’s most powerful supercomputers.
“The emergence of artificial intelligence and data science, as well as billions of simultaneous computer users, is fueling skyrocketing demand on the world’s data centers,” said founder and CEO of Nvidia Jensen Huang. Mellanox is at the forefront of powering processors for deep learning and artificial intelligence solutions. Together, the companies will be able to build bigger and smarter computer systems capable of creating vast networks of super-fast data able to serve as the brains of computers, robots, and self-driving cars that can perceive and understand the world.
Nvidia intends to continue investing in Israeli talent, citing the country as “one of the world’s most important technology centers,” the company said in a statement.
The sale of Mellanox is the third largest “exit” of an Israeli company, surpassed only by Intel’s $15.3 billion acquisition of Mobileye and International Flavors & Fragrances’ $7.1 billion acquisition of Frutarom.
“The success of Mellanox is another sign of respect for the Israeli economy and a source of great pride for the hi-tech industry. The company’s employees have proved the talent and entrepreneurialism of the Israeli worker,” said Israel Finance Minister Moshe Kahlon.
“Despite all the black prophets, Israel’s economy is strong and prosperous, and we will continue to win for the benefit of all the Israeli people and the state,” he added.