March 11 (UPI) -- A bidding war for supercomputer chip maker Mellanox ended Monday with Nvidia announcing it will acquire the San Jose-based company for nearly $7 billion.
The deal is expected to close by the end of 2019, Nvidia said Monday. The combined company will power more than half of the world's 500 largest computers, the company said.
"The data and compute intensity of modern workloads in AI, scientific computing and data analytics is growing exponentially and has put enormous performance demands on hyperscale and enterprise datacenters," Nvidia said in a statement. "While computing demand is surging, CPU performance advances are slowing."
"Addressing this demand will require holistic architectures that connect vast numbers of fast computing nodes over intelligent networking fabrics to form a giant datacenter-scale compute engine," Nvidia CEO Jensen Huang said.
Nvidia beat out industry giants Microsoft and Intel for Mellanox. All three companies offered prices above Mellanox's market capitalization of $5.9 billion when markets closed Friday.
Mellanox, originally founded in Israel, has a long history of collaboration and joint innovation with Nvidia.
Nvidia announced at the Consumer Electronics Show in Las Vegas in January an autopilot system for self-driving vehicles called Nvidia Drive. It was the company's most significant foray into the auto industry.