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Nvidia acquires Mellanox against growing AI, data competition

Nvidia acquires Mellanox for $6.9 billion, as competition increases for platforms that can handle AI and other data-intensive platforms.

Nvidia Corp. is acquiring Israeli interconnect maker Mellanox Technologies Ltd. for $6.9 billion, bringing together two firms that face rapidly accelerating competition for data-intensive computing platforms.

Mellanox and Nvidia, independently and working in collaboration, have staked out a significant footprint in data-intensive high-performance computing (HPC), but the sharks are now circling.

In November, Amazon announced its new chip, Inferentia, aimed at AI and other data-intensive platforms, and it may challenge Nvidia's GPU. In October, Cray announced "Slingshot," an interconnect that is aimed at HPC and AI and other data-centric platforms.

The Nvidia acquires Mellanox news didn't surprise Steve Conway, senior research vice president at HPC research firm Hyperion Research in St. Paul, Minn. "The competition is heating up because the [HPC] market is getting bigger and more attractive," he said, pointing to the announcements by Cray and Amazon as two recent examples.

"It's a smart move for Nvidia and Mellanox to get married because they're going to be stronger together against the competition," Conway said.

In Hyperion's market research studies, 78% of its survey respondents believe that Nvidia will be facing "serious competitive challenges" in the next four to five years, Conway said.

Nvidia acquires Mellanox to combine forces

Mellanox, which makes InfiniBand, a high-speed interconnect, and Nvidia have a sizable footprint on the Top500 list of the world's most powerful supercomputers.

The two companies have already worked together on large HPC systems. In October, the U.S. Dept. of Energy (DOE) unveiled Sierra, a supercomputer with a peak performance of 125 petaflops that uses Nvidia GPUs and Mellanox InfiniBand interconnect, as well as IBM Power 9 CPUs. It is the world's second fastest supercomputer, according to the latest Top500 ranking.

In June, the DOE announced the Summit supercomputer, the world's fastest supercomputer at 200 petaflops, which also uses Nvidia and Mellanox tech.

At one time supercomputing and HPC were entirely focused on CPU processing. GPU chips, originally designed for graphics processing, were found to be adept at processing computationally intensive mathematical problems faster and at a lower cost than a CPU. About a decade ago, Nvidia developed CUDA, a parallel computing platform that enables developers to utilize GPU's for general computing.

More on Mellanox

Mellanox got its start in 1999 as one of a handful of vendors selling InfiniBand switches.

The company, along with its early rivals, positioned InfiniBand as a better alternative to Fibre Channel for storage networks because InfiniBand was faster and had less latency than Fibre Channel.

Storage area network (SAN) administrators were reluctant to move to a new interconnect technology, but InfiniBand eventually caught on for HPC.

Mellanox claims most of the Top500 supercomputer sites use InfiniBand switching and that its InfiniBand and Ethernet products are used in 265 of the top 500 sites.

InfiniBand is also used as an internal interconnect for storage systems, including systems sold by Dell EMC, NetApp, IBM and DataDirect Networks.

Mellanox was the only InfiniBand startup to survive and is one of two InfiniBand vendors left along with Intel. Still, Mellanox now gets most of its revenue from Ethernet. In 2018, it generated $616 million from Ethernet and $438 million from InfiniBand.

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