Nvidia, the top seller of AI chips, announced it is paying $6.9 billion to acquire Israeli chipmaker Mellanox, whose chips power servers in cloud providers’ data centers. The move, which comes about six weeks after Nvidia warned investors of slowing demand for its gaming chips in China, show how Nvidia intends to build out other areas of its business. Nvidia reportedly beat out Intel and Xilinx, which were also interested in buying Mellanox.
Nvidia CEO Jensen Huang is no stranger to adversity, having guided the chipmaker through numerous financial and legal challenges over more than 25 years at the helm. Buying Mellanox could be his way of showing investors that Nvidia, despite the current cloud of uncertainty hanging over its business, still has plenty of room to grow.