# Nvidia Acquires Mellanox

Nvidia's $6.9 billion acquisition of Mellanox Technologies, announced in March 2019 and closed in April 2020, integrated the Israeli-American networking supplier into Nvidia's networking division, ending the brand as a standalone entity.

Nvidia's $6.9 billion acquisition of Mellanox Technologies, announced on March 11, 2019, and completed on April 27, 2020, was a defining transaction in the high-performance computing and data center networking market. The deal brought Mellanox, an Israeli-American supplier of InfiniBand and Ethernet networking equipment, into Nvidia's portfolio, allowing the chip giant to combine its GPU computing strengths with Mellanox's high-speed interconnect technology. The acquisition closed after receiving approval from antitrust authorities in the European Union, the United States, and China. Mellanox was subsequently integrated into Nvidia's networking division, with the Mellanox brand phased out for new products.

Mellanox Technologies Ltd. was a fabless semiconductor company founded in 1999, known for its adapters, switches, software, and cables used in high-performance computing, data centers, cloud computing, and data storage. The acquisition was significant not only for its scale but for the strategic shift it represented, positioning Nvidia to address the growing demand for fast data movement in [artificial-intelligence](https://www.wikiprompt.org/wiki/artificial-intelligence) and [machine-learning](https://www.wikiprompt.org/wiki/machine-learning) workloads, where latency and bandwidth are critical.

## Background: The Rise of Mellanox

Mellanox was incorporated in May 1999 in Yokneam Illit, Israel, by a team of former [intel](https://www.wikiprompt.org/wiki/intel) and Galileo Technologys veterans. The founders included Eyal Waldman, Shai Cohen, Roni Ashuri, Michael Kagan, Evelyn Landman, Eitan Zahavi, and others, leveraging their experience in chip design. The company initially focused on integrated circuits, but by 2009 had evolved into a provider of complete network systems.

In February 2002, Mellanox announced a venture capital round of approximately $56 million, later expanded to $64 million, with investors including [Intel](https://www.wikiprompt.org/wiki/intel), IBM, Sequoia Capital, and U.S. Venture Partners. The company went public on NASDAQ in February 2007, raising $102 million and valuing it at over half a billion dollars under ticker symbol MLNX. A 2009-created investment fund, later detailed publicly in 2014, supported internal and external innovation.

Throughout the 2010s, Mellanox expanded through acquisitions. In February 2011, it bought Voltaire Ltd., a data center switch maker, for about $218 million. In 2013, it acquired assets of XLoom Communications, including opto-electric chip-scale packaging, and in July 2013 purchased Kotura Inc. and IPtronics A/S, expanding its silicon photonics and optical interconnect capabilities. Subsequent acquisitions included the Integrity Project software connectivity firm in July 2014 and EZchip Semiconductor in February 2016, the latter a network processor provider. By 2016, Mellanox revenues reached $857 million.

## Activist Campaign and Change

The company's trajectory shifted in 2018 after Starboard Value LP acquired a 10.7% stake in November 2017. In January 2018, Starboard criticized research spending, urging for short-term profit returns, and pressed for board changes. On January 9, 2018, Mellanox announced it would immediately cease 1550 nm silicon photonics development, a review started in May 2017, and laid off 100 US employees out of a total workforce of 2,900, mostly in Israel.

A board struggle followed, with Starboard proposing a complete replacement of the board and nominating nine candidates, including its head Jeffrey Smith. In May 2018, stockholders approved governance proposals, leading to a settlement in June 2018 where three board members stepped down, replaced by two Starboard nominees and one independent advisor.

## The Acquisition Announcement

On March 11, 2019, [Nvidia](https://www.wikiprompt.org/wiki/nvidia) announced its intent to acquire Mellanox for $6.9 billion in cash. The transaction was one of the largest in the industry that year. Competing bidders included [intel](https://www.wikiprompt.org/wiki/intel) and Xilinx, with [Microsoft](https://www.wikiprompt.org/wiki/microsoft) also expressing interest. The deal closed on April 27, 2020, after securing approval from the European Commission, U.S. Federal Trade Commission, and China's antitrust regulator.

Following the acquisition, Mellanox was incorporated into Nvidia's networking division. Nvidia's CEO Jensen Huang described the deal as a means to accelerate AI and high performance computing, combining GPU with InfiniBand for a unified computing platform. Founder and CEO Eyal Waldman departed in November 2020, having made an estimated $240 million from the transaction.

## Product Portfolio and Market

Mellanox was a fabless semiconductor producer, with its chips manufactured by [TSMC](https://www.wikiprompt.org/wiki/tsmc) starting at least from 2011. Its products included the ConnectX family of ASICs and adapters supporting virtual protocol interconnect (VPI) for both Ethernet and InfiniBand at speeds up to 200 Gbit/s. The Quantum line of InfiniBand switches offered high-radix, low-latency for HPC, with capabilities like SHARP and SHIELD. The Spectrum Ethernet switches and LinkX cables expanded the portfolio.

These products enabled remote direct memory access (RDMA) over Ethernet, critical for high-performance computing, data center workloads, and [large-language-model](https://www.wikiprompt.org/wiki/large-language-model) trains. The company had two primary customers, by 20% of revenue, in 2017, 2018, and 2019, namely Hewlett-Packard and Dell EMC.

## Impact on AI and High-Performance Computing

The acquisition accelerated the adoption of InfiniBand interconnect in the company's computing ecosystem, competing with ethernet-based alternatives. By providing end-to-end network hardware, [Nvidia](https://www.wikiprompt.org/wiki/nvidia) could offer deterministic, low-latency communication for distributed [machine-learning](https://www.wikiprompt.org/wiki/machine-learning) training across thousands of GPUs, moving beyond commodity networks. This has been integral to building modern [deep-learning](https://www.wikiprompt.org/wiki/deep-learning) systems and supporting large-scale energy capacity for both cloud providers and computing centers.

The merging of wired xplexe Mellanox's low-level network optimization with [NVIDIA](https://www.wikiprompt.org/wiki/nvidia)'s software stacks, such as [CUDA](https://www.wikiprompt.org/wiki/cuda) and the [NVIDIA](https://www.wikiprompt.org/wiki/nvidia) networking software , creates a integration that competes with [broadcom](https://www.wikiprompt.org/wiki/broadcom) in server interconnects and with [intel](https://www.wikiprompt.org/wiki/intel) in networking silicon.

## Regional Influence and Venture Ecosystem

Mellanox catalyzed growth in Israel's chip sector, employing engineers in the Gaza and West Bank West Bank regions by 2016. Its technology and talent absorbed by [NVIDIA](https://www.wikiprompt.org/wiki/nvidia) in 2020 have enhanced the Israeli operations and spurred local technology startups.

The company's venture capital arm, which began as an in-house fund in 2009, supported IoT and networking startups, reinforcing Israel's position on the Technology map.

## Legacy and Corporate Departure

Under the new owner, Mellanox's technology continues in products like [NVIDIA](https://www.wikiprompt.org/wiki/nvidia) ConnectX and Quantum, albeit without the brand name. Founder Eyal Waldman left to pursue other Venture activities. The acquisition stands as a milestone in consolidation of the computing and networking markets in 2020.

From a financial and strategic angle, the deal was consequential: a mid-tier networking company became a core component one of the high-performance ecosystem, showcasing an inflection point in the rise of AI-driven systems.

## Conclusion

The Nvidia-Mellanox acquisition solidified the convergence of GPU, acompute and interconnect, established Nvidia as a system-level provider beyond chips. The $6.9 billion transaction ended the \'Mellanox \' brand but enabled architecture that underpins many of the most demanding computational tasks in the coming decade, including [artificial-intelligence](https://www.wikiprompt.org/wiki/artificial-intelligence) research, [machine-learning](https://www.wikiprompt.org/wiki/machine-learning) models, and [large-language-model](https://www.wikiprompt.org/wiki/large-language-model) training.

[NVIDIA](https://www.wikiprompt.org/wiki/nvidia) continues to support Mellanox's technical legacy through products like Connect-X and Quantum, but adapted as [NVIDIA](https://www.wikiprompt.org/wiki/nvidia) Networking within the broader \"accelerated computing\" market. The acquisition is often cited as a key bellwether for the future of AI hardware and the high-performance entry for data infrastructure.

The Mellanox case shares with the 2019 and 2020 era the consolidation trends in the global semiconductor industry, underlining the importance of specialized solutions from cloud to edge.

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Source: https://www.wikiprompt.org/wiki/nvidia-mellanox-acquisition
License: CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0/)
Last updated: 2026-09-09T02:03:01.074667+00:00